Donald Trump has blasted the Federal Reserve for “going loco” as a rout on Wall Street led to a plunge in Asian stocks on Thursday.

The US President took aim at the interest-rate increases this year, saying they were to blame - rather than trade tensions - for the sharp fall in US equities on Wednesday.

Hours after US markets slumped on a heavy selling of technology and internet stock, Asian markets tumbled on Thursday.

Japan's benchmark fell by an unusually wide margin of 3.9 percent, while the Hang Seng Index in Hong Kong and China’s Shanghai Composite fell more than 3.7 percent each. Taiwan’s Taiex index led the rout with a 6.2 percent slump.

The MSCI Asia Pacific Index headed for its worst day since June 2016 -- when the U.K. voted to leave the European Union -- with the measure sliding 3.6 percent.

"It’s just a beginning,” Banny Lam, head of research at CEB International Investment Corp., said. “The U.S. tech bubble may take a while to burst and we are facing many external uncertainties - trade wars, risks in emerging markets currencies and oil price. And people should also watch yuan closely."

Trader Peter Tuchman works on the floor of the New York Stock ExchangeCredit: AP

Shares in Facebook, Amazon, Apple, Netflix and Google’s parent company Alphabet – the so-called “Faang” stocks that have driven US markets to all-time highs recently – all fell in New York trading. Apple and Amazon, the two most valuable companies in the S&P 500, each had their worst day in two and a half years.

President Donald Trump responded to the US stock market sell-off by again criticising the Federal Reserve for raising interest rates, calling it a “mistake.”

He said the decline was “a correction that we’ve been waiting for for a long time,” after being briefed on the market turmoil.

He stepped up his criticism later in a telephone interview on Fox News, stressing his trade conflict was not to blame for the jitters in the markets.

“That wasn’t it. The problem I have is with the Fed,” he said. “The Fed is going wild. They’re raising interest rates and it’s ridiculous.

“The fed is going loco.”

The US Federal Reserve recently raised short-term interest rates for the third time this year, with one more expected before the year ends. Strong economic data and a positive outlook from Fed officials have led to a sell-off in US Treasury bonds, particularly longer-term ones, sparking concerns about even higher interest rates.

A screen above the floor of the New York Stock Exchange shows the closing number of the Dow Jones industrial averageCredit: AP

Stephen Innes of OANDA said that Mr Trump's comments have put pressure on the dollar but "the severity of this equity rout could bring the hawkish Fed narrative into question."

"If the Feds are crazy, this market reaction is bordering on insanity, as so many negative crosscurrents collide that is merely impossible to find a glint of optimism," he told AP.

Just a day before the start of America’s third-quarter earnings season, signs are mounting that companies might not be able to deliver the runaway growth that’s bolstered equities so far in 2018. Investors have long feared the trade war would crimp profits, and now a group of companies is warning that is happening at the same time that rising bond yields make the cost of borrowing higher.

“Earnings are really important because that was part of the concern that sparked the sell-off,” Darrell Cronk, president and chief investment officer at Wells Fargo Investment Institute, told Bloomberg TV in New York. “The concern heading into the third quarter earnings season is about how much trade and tariffs will dent earnings.”